The Malta Independent 26 June 2022, Sunday

Premier Capital to invest €155 million, create 3,000 jobs in European McDonald’s operations

Thursday, 3 November 2016, 10:02 Last update: about 7 years ago

Premier Capital, the Maltese-owned Developmental Licencee for McDonald's in the Baltic States, Greece, Malta and Romania, is to invest €155 million in its restaurant network and create 3,000 new jobs by 2025.

Under its current 10-year plan, the company, which presently operates 134 restaurants and employs 7,000 people serving 100 million customers a year, will grow its footprint to 202 restaurants in its six markets.

Premier Capital is the McDonald's division of Hili Ventures, the Malta-headquartered group which also partners a host of major brands including Apple, CMA CGM, FedEx Express, Konecranes and Peterson across five other divisions engaged in engineering, logistics, technology and property in 10 countries in Europe and North Africa.

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Ever since it was set up in 2005 when it took over Malta's McDonald's operations, Premier Capital has looked to internationalise - first by acquiring the licence for the brand in the Baltics in 2007, then Greece in 2011, and Romania earlier this year.

As a Developmental Licencee, it is committed to evolve its McDonald's operations and footprint in each market by investing consistently in restaurant openings, relocations and renovation, innovation in customer service delivery, and human resources and training.

This year, Premier Capital directed €15 million in investment to its restaurant network and a further €2.5 million to human resources and training programmes for crew. For the next three years alone, Premier Capital has earmarked €55 million for the opening of 24 restaurants in prime locations: eight new restaurants will be opened in Greece, one in Latvia, four in Lithuania, one in Malta, and 10 in Romania, to bring the total number of stores to 157 in six markets by 2019.

A critical factor in the selection of new locations for McDonald's restaurants is the necessary footprint to accommodate Drive-Thru and McCafe operations - both extensive contributors to overall restaurant sales.

Premier Capital's network currently features 68 Drive Thrus and 40 McCafes. Locally, the Drive-Thru restaurants at Malta International Airport and Gharghur serve more than 2.2 million customers a year in a market that serves a total 7.2 million customers. Significantly, Malta's McCafe operations are among the best performers in Europe.

Across Premier Capital's footprint, plans for investment also provide for the renovation of specific restaurants to new interior styling and furnishings to McDonald's-mandated designs, and the relocation of others to superior locations. Modernisation is a key component in Premier Capital's ongoing investment programme. All its existing restaurants will operate the innovative Service Production & Assembly ordering system and upgrade kitchen preparation processes by 2021.

SPA allows McDonald's crew to prepare meals at the time of order according to the customers' requests. The system permits more flexibility, reduces serving time and customisation, and enhances food quality. McDonald's restaurants operating SPA also feature a simplified ordering concept, where customers pay and collect the order at different sections of the counter, or pay by credit card at self-ordering kiosks.

"Our steadfast commitment to investment is our foremost differentiator as a restaurant operator," Premier Capital Chairman Melo Hili says. "The quick service restaurant sector is fast-paced and enormously competitive, and each market we operate in presents a different reality. Besides the major global brands, we are in the market with popular local and regional names. In the Baltics, we currently enjoy a similar market share to Hesburger. In Greece, our major competitor is Goody's Burger House and we are investing steadily to increase our market penetration especially as we are confident the economy will see an upturn in the medium-term.

"In Malta, we work hard at maintaining our market leadership as, despite its size, there are many players vying for customer loyalty. We acquired the Developmental Licence for Romania last January with our sights firmly focused on the market's potential. With a population of 20 million, there is scope for growth far beyond our current 68 restaurants which are, in themselves, superb performers. We are already seeing positive returns on the €60 million we invested to acquire the market."

Romania has been a veritable game-changer in Premier Capital's growth with the company now set to report revenues for 2016 at €230 million with EBITDA of €30 million from last year's €100 million turnover and earnings of €10.4 million.

The projections for group performance anticipate revenues to rise to €275 million and EBITDA to €39 million by 2018.

But behind the numbers is a growing family of people with a passion for living up to the values of one of the world's most iconic brands. This year, Premier Capital more than doubled its staff complement to 7,000 when it welcomed the Romanian team into its fold.

Premier Capital Managing Director Victor Tedesco understands and values every person's contribution to each operation. He was among the team which opened the first McDonald's restaurants in Sliema, Valletta and St Julian's in 1995, and relocated to the Baltics and Greece to oversee the markets as Premier Capital expanded across Europe before returning to Malta only last year.

"McDonald's is essentially a people business," he explains. "It is our people who deliver the service, the familiarity and the hospitality customers expect at every restaurant. They uphold the cultural norms and promote localisation in their home countries and they understand the important position McDonald's enjoys in their local communities. They have experienced first-hand the rewarding life skills and career progression McDonald's provides. I can name so many people in our senior management teams who started out as crew. One of former our regional directors now runs Hili Ventures' Apple division."

As the talent pool grows across the six markets, so too does the opportunity for the sharing of knowledge and good practice across borders. During the year, teams running diverse functions including quality and supply chain, marketing, finance, operations and IT are often brought together in different countries to support each other, identify synergies and leverage economies of scale. Restaurant managers travel to meet their peers in other markets and crew members are seconded to restaurants around the footprint.

"Opportunity is vital to Premier Capital in so many ways," Mr Hili insists. "We believe it is critical that we ensure the business and its people prosper in tandem. It is our way of sharing value with every single one of our stakeholders. It is a strategy that is serving us very well." 
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